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Canada’s worst policy ideas of 2014

Guest post by Daniel Béland, Rachel Laforest and Jennifer Wallner

When the Washington Post’s Wonkblog recently published a list of 11 of the worst U.S. policy ideas of 2014, we asked the question: what would the Canadian equivalent of such a list look like? To simplify the task, we looked at provincial and federal policy proposals officially promoted by a governing party. Here we provide a list of four policies – two provincial and two federal. While some may disagree with our picks – and the list is certainly not comprehensive – this exercise has clear value to stimulate debate about what good and bad policies are.

1. Charter of Values. An obvious contender for worst policy idea of 2014 is the so-called Charter of Values put forward by the PQ government in Quebec. An exercise in policy demagogy, the Charter of Values, and especially the proposed ban on all “ostentatious religious signs” worn by public employees, claimed to protect society against a widely inflated threat (religious accommodations). In the meantime, its main political goal was to exploit xenophobia for the sake of electoral success. Despite the efforts at seducing votes, the PQ lost the April election and the Charter has been relegated to the dustbin. Unsustainable from a legal standpoint, the ban on certain types of religious signs was as a discriminatory measure violating both the federal and the Quebec charters of rights.

2. Amalgamating School Boards. Still keeping with the provinces, this year various policy pundits in BC, Ontario, and Quebec have questioned the role of school boards. A number of audits revealed problems in school boards’ spending habits while there is low voter turnout at municipal elections for Trustee positions. In a quick move, the Quebec Liberal government announced the amalgamation of school boards to reduce the number from 72 to 46. Promoted as a means to increase efficiency and reduce duplication of services, there is no evidence to support these claims. Instead, such amalgamations generate major public opposition and often translate into increased inefficiencies. In fact, Quebec need only to look to its neighbours Ontario and New Brunswick for examples of the negative impacts that rapid and forced amalgamations can have on schooling systems.

3. Regulating Cross-border Pricing. Moving to the federal government, first up is the Price Transparency Act. The bill aims to put an end to price differentials on products between the US and Canada. In effect, it would increase the size and budget of the Competition Bureau in hopes of better monitoring and addressing price discrimination. The problem? It is not an effective policy. The Competition Bureau has no power to narrow the pricing gap. The policy has been heavily criticized by economists who note the policy will have no effect on the Bureau’s ability to regulate fair competition and it does very little to stimulate economic exchange between Canada and the US.

4. Income-splitting. We have saved the worst for last: income splitting. Announced by the Government of Canada with great fanfare, income splitting sounds great on paper. It allows couples to transfer up to $50,000 of income to the spouse with lower income for tax filing purposes. The policy will cut the overall tax bill for families up to a maximum of $2,000 a year. Billed as a means to support Canadian families, only those families with a high earner and a stay-at-home parent stand to gain from the policy. Both the C.D. Howe Institute and the Broadbent Institute estimate that over 85 per cent of families will not benefit at all. The policy also excludes single parents outright, even though they account for a quarter of Canadian households. In the meantime, the benefit from income splitting will likely be offset by the elimination of the Child Tax Credit of $2,000; put simply, the net impact of the policy on families will remain low. With an estimated price tag for Ottawa of $2.4 billion in foregone revenues, many have called the policy a bad use of public resources that is unfair and will in the long run increase inequality when we should be implementing policies to decrease it.

What do our four bad policy ideas have in common? All of them pander to the electorate, looking to seduce votes with seemingly appealing strategies. All are framed as a means to either “increase equality” or “improve efficiency,” when in fact each of them would have the exact opposite result. In our minds, that is why these four represent Canada’s worst policy ideas of 2014.

Care to add anything to the list? Nominations are open below:

Daniel Béland, Johnson-Shoyama Graduate School of Public Policy, University of Regina & Saskatchewan

Rachel Laforest, School of Policy Studies, Queen’s University (@r_laforest)

Jennifer Wallner, School of Political Studies, University of Ottawa (@wallprof)

Canada’s worst policy ideas of 2014 — 7 Comments

As a proud British Columbian, I’m insulted by this Central Canada-centric compilation! Whaddya think we are out here, underachievers?

I nominate the BC government’s Bill 20, passed this spring, which was designed to weaken fatally BC’s system of agricultural land reserves, established in 1973 and without doubt one of the most successful land use programs in North America. Meanwhile, California baked in drought. What, grow our own food?

Don’t forget the electoral “reforms” – creating obstacles for certain people, already discriminated against, to vote (the vouching business) and also the proposal that Canadians with 1 passport who engage in terrorist activities will be tried at home but Canadians with 2 (or more) passports will be deported. Creating two classes of Canadians – when is a citizen not a citizen? I hope it proves illegal, but surely also gets a nomination for cynical appeal to people’s lesser nature.

The proposals that have been going around (e.g. in the Vancouver municipal election) about making housing more affordable by imposing fines on vacant properties strike me as one of the worst. The hand-wavy proposals I’ve seen make it sound like it would be a pretty inefficient and invasive way to collect revenue (that presumably would go to creating a small number of affordable homes), and as for halting rising real estate prices it seems like the well-off may often just absorb the fines. I’m not an economist, but the idea strikes me as another disappointingly ham-fisted economic policy from the left that distracts from better discussions that could be happening about things like tax reform or actually-tested social democratic ways to improve everybody’s economic security.

It’s called FATCA — Foreign Account Tax Compliance Act. It’s a U.S. law and in 2014 the Canadian government, by means an omnibus bill (Part 5 of Bill C-31), put FATCA into Canadian law. Effective July 1, 2014 (Canada Day no less) anyone living in Canada with even the slightest connection to the USA will have all their financial account details (numbers, balances, transactions) compiled by their financial institutions (banks, brokers, insurance companies) and these FATCA reports will be sent to the CRA. The CRA will then pass these reports along to the IRS and from there it’s anybody’s guess what other U.S. 3-letter agency will gain access. FATCA is a threat to the financial privacy and security of individuals living in Canada and to the sovereignty of Canada. It turns all Canadian financial institutions into agents of the IRS and the CRA into an intermediary agent. FATCA has a huge implementation cost attached to it and every single Canadian taxpayer will have to pick up the tab. So I would say that Canada’s worst policy idea of 2014 just happens to be a direct result of one of the USA’s worst policy ideas.